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BlowFish

Market Wizard
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Everything posted by BlowFish

  1. BlowFish
    Great post Kiwi, though the question was are the markets predictable. Your answers are to a more important question namely "Are my trading results predictable"? This naturally leads to the question "Will I act predictably and according to my plan come what may?". Much better questions for traders to contemplate if they can not immediately answer yes to both. Sometimes it is good to sidestep a question when there are more important considerations at hand however I hoped you did not tick 'yes' based on your answer here. Edit: Work on the one thing that can be made predictable in the markets. You.
  2. BlowFish
    I am not nay saying (well I guess i am) it is just friendly advice. Just trying to make sure you aren't going to make expensive mistakes. It is pretty much impossible to avoid draw downs completely (unless you can make 100% winning trades) even with a system that produces 80% winners strings of losers will occur. I wonder what you are basing your results on? Backtesting? Papertrading? In what sort of market conditions? Bull & bear, different volatility?To be perfectly honest your expectations don't seem realistic. That's not criticism its just watching out for someone who has yet to have there first market lesson. Frankly draw downs are inevitable (though of course you might expect to finish the day/week/month up). I really hope you have done adequate research and testig and even then be prepared for things to be different when doing it for real. The first few curve balls can do more damage to your trading psyche than your account.
  3. BlowFish
    Lot's of answers not concerning your figures. Beg steal or borrow a small amount ($5k would do) and compound it into however much your heart desires. Stay away from prop. What's the problem?
  4. BlowFish
    "If we want avert failure in speculation, we must deal with causes. Everything in existence is based on exact proportion and perfect relation. There is no chance in nature as mathematical principles of the highest order are at the foundation of all things. Fardaday said 'there is nothing in the universe but mathematical points of force'." W.D. Gann in how to make profits trading in commodities. I guess we know which way he would have voted!! Edit: he says exactly the same thing when interviewed in December 1909 by Wyckoff in ticker and investment digest.
  5. BlowFish
    I wonder how long it would be before someone mentioned the 'R' word personally I don't think markets are completely random imo they tend to cycle from streaky (trend) to more random distributions (back and forth). Just because they are not completely random does not make them predictable of course, they just have tendencies (imo). What was that website you could go to and it would display charts and you had to guess which where real price charts and which where random data? For the life of me I can't find it but it was a fun exercise.
  6. BlowFish
    "with basically no draw-down other than commiss and slippage." Sounds too good to be true so it probably is (too good to be true). Don't go prop. With minimal draw down and prudent position sizing you should not need that large an account. There is also QQQ's and Spyders that would allow you to build a real audited track record whilst making beer and burgher money. EDIT oops assuming its an index system....still many instruments have mini contracts or closely correlated cheapy equivalents.
  7. BlowFish
    Personally if I was a customer I would rather pay a competitive rate for the execution part and pay for any "value added" separately. Just more transparent like that, I guess I am a transparent sort of guy.
  8. BlowFish

    Phantom of the Pits

    BlowFish replied to weiwei's topic in Books

    I re-read it today after this thread was woken up. Subtlety but importantly different to that oft quoted rhetoric. I would recommend reading the whole thing, if you carefully read Rule 1 is not cut your losers short. It is to scale out if the market is not moving in your favour, this is different to waiting for it to move against you and hitting your stop. The two rules are really mechanisms to bring about changes in behaviour which is what is the real key is.
  9. BlowFish
    Yes, and even having rigorous definitions dosen't guarantee you won't second guess yourself anyway! Without that framework you are adrift without a paddle. The 'corrective' 'trend' in your last charts is a good example. I 'felt' that it was a correction but my framework said that the down trend was over (for now at least).
  10. BlowFish
    I think I see what you are saying now thanks for clarifying. Being a small retail trader whether my money is 'dumb' or not my knowledge of institutional trading is second hand at best. I would not compare the commercials as there objectives are often different. (to reduce business operating risks, or to shift risks temporally for example.) I would look at non-comercial vs non reporting. Wouldn't the traders you are talking about tend to fall in the commercial category? Anyway my broad sweeping statement through an empirical and non scientific study (occasional study at that ) is this - in each category there is usually roughly equal net longs and net shorts. The sort of figures you might see is perhaps a few percent difference between non-commercial and non-reporting. You don't see 80% of one category net long and another category 80% net short. This to me indicates that the idea that the non-commercials are 'smart' and the non-reporting are not is suspect at least. I guess I am not saying this proves anything, it just tends to disprove what I have only ever seen presented as an assumption. (The whole 'smart money' assumption). I do seem to recall having read more rigorous studies that reach a similar conclusion though of course "provide a link or it didn't happen" as they say. As a small retail trader with a fairly near term horizon (certainly well under the weekly chunk the CoT covers) This is not of great concern to me. Having said that I am always interested in learning more about 'the industry', who knows might even change the way I approach the markets
  11. BlowFish
    Interesting character Gann. His price action and money management stuff was very solid and I am pretty sure enough to extract cash from the markets consistently with little else. On top of that you have the geometric and mathematical stuff and then the truly esoteric (astrology). I wonder why people are so attracted to the esoteric? Some believe that his 'secrets' are in Tunnel Through the Air if you examine all the dates and work out the conjunctions of planets and market conditions at those times. Anyway another thread I seem to be taking off course, apologies.
  12. BlowFish
    Interesting last few posts. Minor S/R levels can suck you in, that is easily surmountable with discipline. Large clusters or zones of 'major' S/R can be a bit more challenging. Firewalker that was yesterdays (Tuesdays) action I would guess? By my definition strictly speaking it would have been the end of trend. Of course just because a trend 'ends' does not mean it can not resume. There where clues that there was not enough buying interest but thats another story I guess. If you are rigorous and consistent does it matter how you define the end of a trend?
  13. BlowFish
    Im kind of confused why all the questions too. I am also having trouble understanding where some people are coming from as they roll other concepts into the mix (not just on this thread).
  14. BlowFish
    Yes its kind of a 'blunt' instrument in so far as the categories are fairly broad. There is the assumption too that its is predominantly retail traders that fall below exchanges reporting standards. The figures (with the caveat that the categories are perhaps not 'precise') are accurate though aren't they? It does seem that the figures do not support the idea that retail traders are net losers and the 'large' traders are net winners. I think that's pretty clear unless some of these big boys are not reporting somehow? I am not sure whether this is the correct thread to consider this. In a couple of recent threads I wanted to mention the CoT and couldn't hold back any longer, perhaps in the is VSA bunkum thread Actually I believe that VSA has merit it's just this idea that there is 'smart money' is as much a marketing ploy as anything. Its certainly hugely simplistic and not representative of the various types of informed participant. If anyone is really interested in who the various market participants are and there motives and methods for trading I can not recommend Larry Haris Trading & Exchanges Market Microstructure for Practitioners strongly enough.
  15. BlowFish
    The formula is as follows: F = (s * ert) - D where: F = Theoretical Futures Price s = Spot Index Price e = 2.7183 which is the Natural Exponential Function r = short-term interest rate t = number of days to futures expiration/360 D = dividends, expressed in index points, for stocks going ex-dividend prior to futures expiration. Fair value = s(1+(r-D)) Fair Value is probably of more interest to traders its simply cost of the index plus interest you'd need to pay to buy all the stocks - dividend's you would get on those stocks. http://www.programtrading.com/ for more on fair value.
  16. BlowFish
    Comitment of Traders Report seems to suggest that the idea retail traders are less 'smart' is not the case. (If you concider smart as beeing on the right side of the market). The proportion of winners and losers amongst hedgers large players and the small retail traders is more or less the same. Edit: not sure if this is relevant but I find some of the ideas in these 'market micro structure' discussions confusing...I'd recommend everyone read Harris great clarity there
  17. BlowFish
    Personally I didn't jump in as there was too much conjecture and not enough 'fact' market micro structure and inter market relationship is fairly well documented. I was also a wee bit confused what the core premise for the thread was. Chalk that up to me being a bit slow sometimes. For example no mention of weightings until the second page. An assumption that the underlying somehow has more 'value' (value meaning 'usefulness' as well as its traditional trading meaning) presumably as its more tangible than derivatives. This seems to have lead to an assumption that the future simply follows the underlying where most of the time the reverse appears to be true (this empirically rather than through statistical study). I guess its because its much easier to short a futures contract than short a basket of 500 stocks. There are lots of markets that are highly correlated (at times) that's before you get into options, leaps, warrants single stock futures and some of the more exotic derivatives. Mustn't forget the Spyders either. Of course things like bonds, oil and gold fit into the jigsaw. Theres is a whole part of the industry to do statistical arbitrage that will bring things back into line if they get out of wack, so not to worry! By trading one of the 'majors' like the ES you are trading the elephant rather than the flies though it is sometimes fun to trade a fly (Russell used to be enjoyable). I don't use MP but a robust model for looking at a market should 'work' regardless of what's causing the market to move. 9including arbitrage). Is it your thesis that 'models' that don't look at correlated markets are less robust?
  18. BlowFish
    Indeed but do you work on 'predicting' what price will do?
  19. BlowFish
    Fair enough BB but if your beliefs are close to 'reality' you are much likely to to do better than if they are not. That's just my opinion which is based on a belief anyway:) Some people believe things despite compelling evidence to the contrary. This is likely to adversely effect an individuals trading. I think a core belief in predictability might lead to some nasty trading issues. For example 'grailittis' (if you can not reliably make those predictions lets find a method that allows it). Or numerous psychological issues, e.g. if the market is predictable then any loosing trade is simply a result of you not being able to predict well enough. As to consistently predictable well you only need to make one or two predictions, but almost by definition they must be consistent. I imagine some believe that the market is predictable just not all the time? Personally I think the market has tendencies which is a different thing. Believing that something is predictable based on tendencies is dangerous imho.
  20. BlowFish
    Ahh beliefs, there is an interesting topic, but one for another thread. If a tree falls in the forest but no one hears it, does it really fall? If the market is predictable but you can not predict it, it may as well be that tree in the forest i.e. un predictable from the point of view of trading. I am surprised there are so many that believe markets are predictable to be honest. Predict - to declare or tell in advance; prophesy; foretell. Trading an edge is not predicting. Anticipating is not predicting (I guess I am an 'anticipation' trader btw) S/R and trading price action off of it is not predicting. Thinking a market is over bought or over sold so trading an anticipated reversion to some sort of mean is not predicting. Actually there are fairly few methods that lend themselves to prediction. Geometric based approaches can, Cycle stuff, Astro (which most thing is for fruitcakes!) Neural nets, those are the ones spring to mind. Funnily enough my girlfriend threw a surprise party for me yesterday and one of the guests was an old trading buddy. He is one of the few traders I know who is 'prediction' orientated. He gave me a chart with S&P turning points (time only) for next week, along with a CD with some of the work he's doing currently. He used a kind of hybrid cycle geometry math approach. He was quite excited as its been remarkably accurate in his testing. Luckily it isn't necessary to predict to extract money from the market thought that's not what's under discussion.
  21. BlowFish
    I wonder if I might ask something of the predictors? Using your favourite instrument, perhaps you could tell me mondays high and low and what time they will be put in? Thanks, appreciate it :)
  22. BlowFish
    Just wondered if any of you guys have looked at pryapoint byDon Hall? Based on SQ9 (I believe). I used to use Ensign some time back and it had it implemented. Very interesting seeing as it only needs a single (significant) point to anchor. It was one of those things that needed adjusting to tune it to 'frequency' and/or 'amplitude' and these could double or go out of phase as conditions changed. It was uncanny though when it all lined up(which was often). The other close relation (which may have been mentioned, I am an occasional visitor in this thread) is good ole Murray Math. Makes me think perhaps its not the lines you use that matter its how you trade them. Some of these things really do seem 'in tune' though.
  23. BlowFish
    By technical analysis do you mean indicators oscillators etc. or more generally how to read a price chart? There is a bit of a catch 22 when starting out. Its hard to know what approach is going to resonate with you without looking at bunch of different approaches. Furthermore it is hard to evaluate the veracity of various approaches without having some knowledge already. Check out the book review section here as a start.
  24. BlowFish
    Thats it I want my money back :) :) No new thread!
  25. BlowFish
    'Ultra' scalpers might make upwards of a thousand trades a day, a swing trader might only take a couple of trades a week. I know which sounds most tiring to me!
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